Possibility Of Sustainable Growth Limited For INTC
Analysts at Technology Research Group reiterate their "sell" rating on Intel (NASDAQ: INTC). The target price for INTC is set to $19.
Intel reported its Q1 revenue and GAAP earnings marginally higher than the estimates. “Management and media outlets publicized this as a stellar quarter. A look behind the numbers tempers enthusiasm. Inventory turns and gross margin moved lower on a sequential basis and by a disproportionately larger amount than the top-line. More important is the fact that margins are still benefiting from previous cost containment measures,” the analysts mention.
Technology Research Group says, “Chief rival Advanced Micro Devices (NYSE: AMD) trades at 22 times. Though financials are seriously distressed, AMD is an ever present nuisance on the pricing front. This creates another risk factor with regard to Intel’s P&L outlook.”
The analysts add, “For now, we remain unconvinced that progress can be sustained on a purely operating basis.”
